Business, general

Competitive and cooperative inventory policies in a two-stage supply chain

Article Abstract:

A study was conducted to examine the difference between cooperative and independent, competitive and global optimization in a serial supply chain with one retailer and one supplier. Independent decision making was modeled using two games, namely, the Echelon Inventory game and the Local Inventory game. The two-stage serial supply chain consisted of stationary stochastic demand and fixed transportation times. The firms simultaneously choose their base stock levels in both games, which is their sole strategic decision and cannot be changed once it has been declared. It is assumed that both firms are concerned about consumer backorders which is important in analyzing the influence of their preferences on their behavior. It was shown that when both firms care about consumer backorders, their efficiency decreases and the supply chain optimal solution is not a Nash equilibrium.

Author: Zipkin, Paul H., Cachon, Gerard P.

Publisher:Institute for Operations Research and the Management SciencesPublication Name:Management ScienceSubject:Business, generalISSN:0025-1909Year:1999

Economics, Research and Development in the Social Sciences and Humanities, Research, Competition (Economics), Supply-side economics, Cooperation (Economics), Cooperation, Inventories

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Performance analysis of a multi-item production-inventory system under alternative policies

Article Abstract:

The performance of a multi-item production-inventory system is examined. The study compares two alternative policies that use opposing modes of gathering and applying information. One policy is characterized by centralized information and control, while the other is marked by decentralization. A closed-form performance measure, called the first-come-first-served policy, is formulated for one of these two control policies. For the other, a comparable approximation is developed called the longest-queue policy. These system performance measures are tested using simulations to explore several basic managerial issues, such as the significance of centralized information in complex systems and the impact of the product line's breadth on performance.

Author: Zipkin, Paul H.

Publisher:Institute for Operations Research and the Management SciencesPublication Name:Management ScienceSubject:Business, generalISSN:0025-1909Year:1995